"l 4.. .., . -. Wde CORE Energ ia El?Ctrica CENTRAL OFFICE FOR RECOVERY, RECONSTRUCTION AND RESILIENCY vi" 1- 1-.- The Grid Modernization of Puerto Rico Transforming and Upgrading the Energy Sector Background: The Puerto Rican Grid Recovery presents an opportunity to transform the electrical grid of Puerto Rico by implementing solutions that are customer-centric, resilient, and sustainable. WHERE WE WERE? Hurricane Maria caused the longest power outage in U.S. history – leaving parts of Puerto Rico without electricity for 328 days. The damage from the Hurricanes of 2017 was exacerbated by decades of underinvestment and deficient maintenance of critical infrastructure. 3.4 million Residents lost power immediately1 328 days 84 days on average, until power was restored to residents2 25% Of transmission line towers destroyed3 WHERE WE ARE GOING? The Electrical Grid Modernization (GridMod) Plan will rebuild damaged facilities to higher standards, improve quality of life, and increase reliability in energy services. The GridMod Plan will result in a decentralized and flexible grid that will be affordable to maintain, lead to reduced costs for consumers, and provide greener and more sustainable solutions. 1 https://www.cnn.com/2018/08/14/us/puerto-rico-power-restored/index.html 2 https://www.forbes.com/sites/pikeresearch/2019/03/18/is-puerto-rico-providing-a-blueprint-to-reinvent-the-overall-us-power-grid/#2e7c108613d7 3 https://recovery.pr/tpbackend_prod/api/document/download/566 (page 41) 2 100% by 2050 Apr 2019 Act 17-2019 (Puerto Rico Energy Public Policy Act) Aug 2018 Governor s Recovery Plan: Transformation and Innovation In the Wake of Devastation Nov 2017 Build Back Better Oct 2017 Sep 2017 Jan 2018 Apr 2018 Jul 2018 Oct 2018 Jan 2019 Apr 2019 Oct 2019 Grid Modernization Plan for Puerto Rico Jul 2019 Oct 2019 Dec 2019 Dec 2017 Jun 2018 Oct 2018 Feb 2019 Jun 2019 Build Back Better: Reimagining and Strengthening the Power Grid of Puerto Rico US DOE Report: Energy Resilience Solutions for the Puerto Rico Grid Energy Systems Modernization Summit PREPA IRP Submission PREPA IRP Resubmission Goals: The GridMod Plan A customer-centric, resilient, and sustainable electrical grid is key to the economic growth of Puerto Rico. The GridMod Plan is guided by 3 basic principles to “Build Back Better” from the devastation of the 2017 Hurricanes. Customer-Centric Resilient • Improve affordability for residents and businesses • Reinforce the electrical grid to withstand future extreme weather • Transform the customer service system and increase customer engagement with the utility • Invest in emergency preparedness • Decentralize the grid to reduce and isolate outages Allow users to both produce and consume energy • Increase capacity to meet peak demand • Sustainable • Develop an energy ecosystem that spurs job and business growth, improving stability for utilities, the energy sector, and the overall economy • Increase the use of Liquified Natural Gas (LNG) to transition away from legacy fossil fuels • Position Puerto Rico as a leader in green energy for the United States with a vision of100% renewable generation by 2050 4 Deep-Dive: Customer-Centricity The GridMod plan is designed to prioritize and empower the residents and businesses of Puerto Rico by providing affordable, flexible, and efficient energy solutions. The GridMod Plan provides the following benefits to customers: Affordability • Decrease overall operating costs to customers and the Government of Puerto Rico. With a system that is more reliable, affordable, and easier to maintain Efficiency Flexibility • • • Increase the number of options for electricity. A mix of sources will be available through gradual transition from traditional to renewable Modernize customer systems for customers to best address their energy needs and increase overall customer engagement Opportunity to become prosumers, consuming power as needed and contributing excess energy back into the grid through use of renewables • Increase LNG generation. LNG is 50% more efficient than older, oil-fired generation and significantly reduces emissions • Implement a smarter grid that will use advanced analytics to distribute energy where and when it is needed most • Use smart meters and advanced software to reduce theft & billing errors while reducing cost. 5 Deep-Dive: Resilient Through a focus on infrastructure, technology, and capacity for clean energy – the GridMod Plan will enable the Puerto Rican energy grid to be more resilient to the potential impacts of weather and cyber threats, and it will posture the electrical grid to more quickly return to service in the event of future disasters. Hardening the grid • Repair and harden infrastructure to better withstand weather events • Reinforce substations to withstand flooding and high-winds • • Optimizing Capacity Smartening the Grid • Decentralize the grid with 8 Islandable Microgrids and Distributed Energy Resource technology • Focus on LNG over legacy fuels that are more costly, inefficient, and toxic to the environment • Upgrade control systems with smart grid diagnostic centers and digital sensors • Secure the grid with modern cybersecurity systems and physical security measures • Prepare grid to support increased use of solar, battery, and LNG • Pilot emerging technology at the Technology & Innovation Center • Underground lines that are high-risk or serve critical loads Reduce restoration time and costs with modernized infrastructure • • Streamline operations with systems integration and automation of services • • Distribute response facilities in geographically disbursed areas Leverage information systems with IT geospatial capabilities and advanced monitoring solutions Establish a Management Program to oversee maintenance Install mitigation technology, such as automated switching devices and microprocessor relays Reducing vulnerabilities 6 Deep-Dive: Sustainable The GridMod Plan promotes sustainable development and combats climate change by preparing the electrical grid to integrate renewables, change the fuel mix, and develop a power grid that can be maintained in the long-term. I N T E G R AT I N G S O L A R Prepare the grid to integrate solar technology at the maximum rate possible L E V E R A G I N G S T O R A G E C A PA C I T Y Install 600 to 900 MW of battery energy storage to extend utility of solar power REDUCING EMISSIONS Shift from legacy fuels to LNG for cheaper, cleaner, and more efficient energy to supplement long-term plans to increase renewables EMPOWERING COMMUNITIES Develop the social and economic policies that create an energy ecosystem benefiting businesses and communities 7 Roll-out Timeline The GridMod Plan will be implemented in three phases over the subsequent 10-years. While 10-years is an aggressive timeline – it is critical to rebuild quickly to prepare the island with a resilient grid in the event of future disasters. Wave 1 Foundation [Years 1-4]: Wave 2 Standardization [Years 5-7]: Wave 3 Transformation [Years 7-10]: Focus on: • Codes & Standards • Hardening of Transmission, Substations & Distribution • Repairing and Hardening of Critical Infrastructure & Assets • Communications • AMI or “Smart Meters” • Cybersecurity Framework • Emergency Preparedness Focus on: • Evolution to a “Flexible” Grid • Decentralizing Generation with Supporting Fuel Infrastructure • Integrating Renewable and Battery Storage • Targeted Voltage Conversion • Fault-Isolation and Distribution Automation • Selective Undergrounding Focus on: • Islandable Grids • Customer Systems and Technology • Two-Way Power Flow Operations • Grid Awareness, Analytics & Intelligence • Emergency Operations Center • Security Operations Center Year 1 Year 2 Year 3 Year 4 Year 5 Generation & Fuel 65% of Generation & Fuel spending ($2.5 B) in Year 3. Year 6 Year 7 Year 8 Year 9 Year 10 Technology Operations Technology spending Year 8 sees a resurgence of culminates in Year 6. operations spending, with focus on anticipated maintenance and DERS & Microgrid activities. 33% of DERS & microgrid spending ($572 M) in Year 3. 8 Cost Breakdown by Category The costs associated with the GridMod Plan are distributed across 6 categories and total an investment strategy of $20.3 billion. 1 Transmission & Substations Harden the transmission grid; reinforce or relocate existing high and medium voltage substations 2 $6.5 Distribution Strengthen poles and lines to reduce outages; relocate equipment; automate and relocate inaccessible lines Total Investment of the GridMod Plan is ~$20.3 Billion $5.7 3 Generation & Infrastructure Increase clean energy; reinforce current generation plants; improve reliability 4 $3.9 Technology Automate grid capabilities; upgrade customer systems $1.8 5 $1.8 $0.7 Transmission Distribution Generation & Technology & Substations Infrastructure Microgrids Other Microgrids Add value and reduce costs through Distributed Energy Resource programs 6 Other Implement security (physical and cyber), systems operations, emergency preparedness, and operational efficiency Total Spending by Category over the Next 10 Years [In Billions] 9 The Investment Plan The GridMod Plan will require a coordinated investment across the Government of Puerto Rico, Federal programs, and private investments. I N V E S T M E N T S T R AT E G Y $20.3 B Total Investment $2 B Average per Year 60% of investments are in Transmission & Distribution (T&D) 60% T&D 10